BlackBerry is laser-focused on the enterprise with BES10

After encountering problems last year selling its newest smartphones, BlackBerry has shifted to a stronger focus on the enterprise, especially through distribution -- often for free -- of its BlackBerry Enterprise Service 10 mobility management client software.

Fighting a steady stream of bad press in the past six months, the company regularly issues press releases and blogs touting new or upgrading BES10 customers, such as this recent one regarding Virginia-based Science Applications International Corp.

On Thursday, BlackBerry proclaimed that it has issued 800,000 BES10 client licenses since March 31, when it launched a free perpetual BES10 licensing program for a limited time called EZ Pass.

On Wednesday, Strategy Analytics released a report (registration required) concluding that migrating from BES5 to BES10 cost less than half as much over five years when compared to migrating from BES5 to five competing enterprise mobility management (EMM) offerings: AirWatch (with VMware), Citrix, IBM (with Fiberlink), Good Technology and MobileIron. Blackberry also promoted the report's conclusion in a blog post.

BES10 works in highly secure settings, as well as at enterprises with BYOD (Bring Your Own Device) policies, where multiple mobile platforms including BlackBerry, iOS and Android must be supported. IT staffs can use BES10 to manage a variety of devices, applications and users from a single console.

A BlackBerry spokeswoman, in a statement to Computerworld, said that BlackBerry is the leading EMM vendor, with more customers than the top three competitors combined. She noted the U.S. Department of Defense has granted BlackBerry devices "Full Operational Capability" certification, while all G7 governments and the 10 largest enterprises in each of the pharmaceutical, legal and auto industries are BlackBerry customers.

In March, BlackBerry blogged about its recent enterprise successes in an infographic, and said it had more than 30,000 BES10 servers installed globally. Analysts, however, are concerned that BlackBerry hasn't stated how many of the 30,000 servers are for trial customers or full adopters.

While the 800,000 new BES10 clients licenses since March 31 may sound impressive, analysts noted that the licenses have cost customers nothing or very little. Of course, free client licenses don't cover the substantial cost of BES10 servers needed in each enterprise and related costs. Other EMM providers are also offering customers free client licensing, according to analysts. Microsoft Exchange Activesync is free to any Exchange customer.

"I don't think whether BES10 is cost effective or not is the issue for most of our enterprise clients," said Ken Dulaney, an analyst at Gartner. "Many customers have been offered BES10 for free. Instead, customers are all about managing the risk issues."

Last year, Dulaney advised Gartner clients to consider finding alternatives to BlackBerry because of concerns about its products, such as poor sales of the Z10 and Q10 smartphones, and its shaky corporate and financial future. On Thursday, Dulaney said, "we are OK with staying with BlackBerry as long as the enterprise knows how to manage the risk factors. So it's not about Gartner telling them to get off BlackBerry; it's really about managing risk and their tolerance for risk."

Dulaney also praised BlackBerry CEO John Chen, who was hired last November after a failed bid to take the company private led to the departure of previous CEO Thorsten Heins and other executives.

"Chen has been given a supreme challenge at BlackBerry and he is an effective manager," Dulaney said. "If anyone can fix BlackBerry, he can. But the challenges are large."

Other analysts were less charitable.

BlackBerry's increased focus on enterprise customers is welcome, "but is something they should have done years ago," said Patrick Moorhead, an analyst at Moor Insights & Strategy. "They continue to lose customers, just at a slower rate. To survive, they need to quickly establish themselves as the preferred cross-platform mobile device management solution."

Jack Gold, an analyst at J. Gold Associates, said future versions of BES with added capabilities stand to keep customers interested in migrating to BlackBerry or staying put, although it isn't clear whether BES would be a company's exclusive choice or just one of several EMM software products they use.

"BES10 is a viable platform, and BlackBerry is making it very cost-attractive to upgrade by matching competitors' pricing," Gold said. "Overall, I think BlackBerry is making the right competitive moves, but what isn't clear yet is how many companies are upgrading to BES10 for keeps or just kicking the tires."

Carolina Milanesi, chief of research for Kantar WorldPanel ComTech, was the most pessimistic. "I still struggle to see how BlackBerry can turn things around," she said. "The issues seem to be all the same. They say they want to focus on enterprise, but not from a device perspective. The EMM space is very, very competitive and organizations are looking for committed, experienced vendors that can work across platforms and devices.

"There is no question that BlackBerry understands enterprises and they can even offer much of what is needed, but I am just not sure they can do it in a competitive or differentiated way," she said.

BlackBerry issues its next quarterly earnings report on June 19. The stock was trading Thursday on the Nasdaq at $7.37 per share mid-day and reached as high as $16.16 in the past year.

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